Films, Fiction and Fact

Sun (Auckland), Volume IV, Issue 1079, 17 September 1930, Page 10

Films, Fiction and Fact

NEW ZEALAND AND TALKIES

More of the “Boycott Bludgeon” IT is a fact that the American producers are boycotting * New Zealand. No new releases are being made; pictures contracted for are being supplied. • It is a fact that the Americans have secured a .strongfoothold in Australia, as was indicated in the last article on the “Trade War”. Fox has secured control of HoytsW illiamsons in Australia and it is now rumoured that they are about to extend their control to New Zealand.

It is a fact that the New Zealand i exhibitor is in a desperate condition. I He cannot carry on without American i films. The British producer cannot meet his requirements, leaving all question of quality out of it. He cannot meet quantity requirements. He is over-charged for the installation of talking equipment, compelled to expend enormous sums of borrowed money for this equipment: he is loaded down with useless silent pictures, charged excessive rates for talking pictures. His profits are Now he is the main sufferer in a quarrel between the Government and the American producers. So writes the corresjoondent whose previous article, "The Boycott Bludgeon,” has created a controversy. We do not suggest for one moment tha: the Government should follow the examine of the French Government and give in. Rather otherwise. We suggest that they should stand firm except on one point—tire producers should be allowed to deduct the landing cost of the prints before the tax is assessed. We also suggest that, since the boycott is the result of Government action, the Government should protect the picture exhibitors by declaring a moratorium in their favour, relieving them of all rates, rents, taxes and interest charges on capital until the boycott is lifted. Interest charges, etc., should be met by the whole community, not by one section, who have for years been subjected to special sales-tax under the heading of amusement-tax. It is a tact that this boycott is a direct challenge on the part of the Americans; that it does indicate what we may expect from American traders when they have developed a suitable trade situation for action. The American plan of campaign is: 1. Appoint local agents on shortterm agreements. 2. Insist on American trading name being used. 3. Use every endeavour to have local agents invest capital in buildings, etc. 4. All advertising to be done in American trade name. 5. N'o goodwill to be allowed. . 6. Manufacturer or American producer to have the right to take over stocks (books, etc.), at landed cost, less depreciation, should they desire at the termination of agency. How the plan works out in practice is rather interestiug. The New Zealand or Australian rejjresentative secures an American agency usually paying cash for goods on or before arrival. He works hard for some years until the line is firmly established. When the hard work is done, the initial outlay of capital and time begins to bring results, a visit is made by a head office representative, who carries with him a goodwill message, invariably congratulating the agent on his splendid progress. He is the honoured guest. The agent cheerfully shows him round, plays golf with him, votes him a good fellow. They part the best of friends. Result: On his report to headquarters, the Agency is no-t renewed. Another American comes to take over. Of course there will be no change, things will go on just the same, but instead of being an agent you become a direct employee of tile American company—for a time. In Australia there are many examples of how this plan works out. The moving picture industry throughoui the Empire is an example to which it is worth any man giving his attention and serious consideration. It is a real object lesson and should act as a warning.

On the insecure foundation of the American source of supply, millions have been invested in Australia and New Zealand in the building of picture exhibition houses. For a time all went well, the Americans supplied the hlms, made reasonable profits, everything was considered satisfactory. The next move was the establishment of Australian Distributing Exchange, to control the distribution of films in Australia and New Zealand, The picture exhibitors were compelled to bid one against the other for films, to sign block bookings on ruinous percentage rates. The next move was the introduction of the talkie picture arid equipment. Equipment was installed at America s cost, plus rental and compulsory service and replacement charges. Today we have reached the final stage; not content with taking tne last possible cent from the exhibitor. the American producer objects to paying income tax. The proposed Government Film Tax does not exceed the Income Tax paid by the average New Zealand trader whose turnover reaches the same figure. WHAT WILL HAPPEN?

What, is behind the boycott? How long will it last? Unless some steps are taken by the Government to protect the exhibitors from being foj-ced into liquidation, what will happen 'A 1 e The boycott will be kept up till the New Zealand exhibitors are forced into liquidation, when they will be bought up by the American producers. All the American talking equipment in the Nev,- Zealand picture houses automatically _ reverts to the American house which controls the same. The equipment is rented, not sold. Should tho exhibitor fail to meet his payments, he has the capital payment made, all hire paid. Even if full payment of tlie installation was made it is still the property of the vendors, on rent, and subject to his service charges for replacements of valves, etc., at at least 100 per cent above open market value. This really means that the American picture producers would become the owners and controllers of the picture businesses in the Dominions. As has been previously pointed out, "Fox” has actually secured control in Australia. of Hoyts circuit, and have announced I heir intention of producing in Australia. It must not he thought that the picture business is an isolated case, for such is not the fact. Many specialty lines have been taken over by an American head .office, perhaps not in the same manner, but with the same effect. Those who built the business up, who invested their capital, now

find themselves out, or, at the best, employees under direct American management, controlled by imported Americans. To prevent retaliation America passed the restricted imports law. If, for example, one of our local companies wished to erect a factory in America, and appoint a New Zealander as resident manager there, it could not be done. There is no law to prevent one appointing American agents. There is, however, a tariff to prohibit the import of raw material. It is an honest 100 per cent, slogan: “America for the Americans.” . From the foregoing it may be said I am prejudiced against America and the Americans. Such is not th.e case. I know America, know a large number of Americans, and some of my best friends are Americans; but unfortunately the best type of American does not control the Press or appoint the Government.

It is easy to criticise; easy if one is not financially interested (and I am not in the jneture show business) to say: "Well, let them boycott us; who cares? We could well afford to do without talkies for as long as they like.” The fact remains, however, that a number of citizens of this and every other city and many of the smaller towns, have invested millions in this business. Some thousands of employees depend on it for their living. The Government, through the sales-tax (amusement-tax) derives large revenue at little or no collecting cost. These points must 'be considered. True, the American producers declared war. No doubt the Government made a thorough investigation before the tax was imposed. LOCK-OUT OR BOYCOTT? The American producers through their Australian representative, Sir Victor Wilson, claim it is a lock-out, not a boycott; that the tax would leave no profit. There was, and still is, a constitutional method of approaching Parliament, and if, after thorough investigation it was proved beyond doubt that this tax was unfair, did leave no profit, I venture to say Parliament would grant relief. What the American producers should do is to place their case in the hands of some reputable firm of New Zealand public auditors who, after investigation, could forward a petition to Parliament requesting that a commission or committee be set up to investigate their claim of unfair taxation. It is not that we do not wish to do business with America. We do. But we do not just wish America to sell goods to us. We wish to exchange goods with America.

The present position is impossible. Business that is not mutually satisfactory to buyer aud seller cannot last. If this tax is unjust, then it should be removed and a fair tax fixed. If, on the other hand, the Government is demanding no more than others pay, the method of collecting does not really make any difference. There is another course the American producers could adopt—to place their case in the hands of the 'Associated Chambers of Commerce and ask their aid and assistance—ask them to approach the Government if their case is good. If, on the other hand, the American producers say “Nothing doing” and "We will dictate our own terms,” then the Government should accept the challenge, protect those whose capital is at stake and add sufficient duty on other American lines to make up the lost revenue. It certainly is most unfair to those who are most vitally interested, and are absolutely powerless, that they should be made to suffer.

I would make the following suggestion to those interested in the importation of American goods:—That the3 r take steps to secure theiy agencies by having a turnover clause. That is to say. that they hold the agency not for a term of years, but as long as they purchase not less than a stated value eadh year and that the principals agree to supply not less than a stated value each year. Time contracts are not safe.